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proposition-2-and-you

Proposition 2 and You

proposition-2-and-you

Proposition 2 coming up for vote November 7th how does this benefit you?

On Nov. 7, 2017, a vote may be passed that will change the way credit unions in Texas operate.

As a member of PrimeWay you owe it to yourself to learn all you can about the proposed amendment to Texas law. As your credit union, we owe it to you to give you all the information you could possibly need about Proposition 2.

Benefits to consumers

 This proposition can benefit you by making lines of credit easily obtainable to you as long as the fair market value remains below 80%. It will also allow you to refinance a home equity loan into a non-home equity loan so you can only have one payment, which as it is now that is prohibited so you have two separate loans with two payments.

1.) What is Proposition 2?

There are seven proposed amendments to the Texas State Constitution that will be up for vote this November. The second amendment, commonly referred to as "Proposition 2," will update the Home Equity Law if passed.

Summary:

 SJR 60 proposes a constitutional amendment to require that certain conditions be met for the refinancing of a home equity loan to be secured by a voluntary lien on a homestead. The amendment also would: redefine what is excluded in the calculation of the cap on fees associated with a home equity loan, lower the cap from 3% to 2% of the original principal amount of the extension of credit, and specify that such fees are in addition to any bona fide discount points used to buy down the interest rate. The amendment would further specify the list of authorized lenders to make home equity loans, change the threshold for an advance of a home equity line of credit, allow agricultural property owners to acquire home equity loans, and update technical terminology in the Texas Constitution. The amendment would be effective on January 1, 2018, and applicable only to a home equity loan made or refinanced on or after that date.

2.) Who will be affected by Proposition 2?

Homeowners and landowners will be most affected by Prop 2. In addition, anyone who plans to purchase a home or a piece of land in the future will be positively affected by Prop 2.

 

3.) How will Proposition 2 change things for credit union members?

If Prop 2 is voted into effect, financing a home equity loan in Texas will become a whole lot easier. The current law restricts fees that can be charged to create a home equity loan or a home equity line of credit (HELOC). This makes financing Home Equity Loans and HELOCs extremely difficult, especially on properties that fall below a certain value. By easing these restrictions, Proposition 2 will allow more credit union members in Texas to access home equity loans, especially if the requested amount is smaller.

By enabling easier and broader access to a home's equity, Prop 2 will ultimately offer homeowners more economic freedom. Prop 2 also affects landowners. If the amendment is passed, homestead owners on all types of agricultural properties will be able to qualify for and secure a home equity loan.

4.) Are there other propositions on this year's ballot that affect credit union members?

Yes. If voted into effect, Proposition 7, which is also on the ballot, allows financial institutions to offer incentives to members for saving money. This includes prizes, special offers and promotions linked to greater savings. We want to reward your hard work; vote to give us the permission to do just that!

 Credit unions in Texas are urging their members to help vote these propositions into law. Please go vote on November 7, 2017 and vote YES!